Top 5 Things to Consider Before Applying for a Quick Loan

When you’re at the mercy of banks or debt collectors; sometimes it’s so hard to borrow money even if you’ve promised lenders (even your life) for timely payments.

The initial factor that moneylenders tend to scrutinize from a borrower is none other than – his credit score and credit history. If you’ve got a good credit score and flawless credit payments, then borrowing money should be brisk. Otherwise, you might be at your wits’ end and just throw in the white towel in the end.

Sigh. And double sigh because it’s almost Christmas.

But wait – what about quick loans? There are a handful of quick loans out there that are quite lenient when it comes to credit checks and some of those quick loans even have relatively lower interest rates than that of banks. Sounds good so far, right? Right – and wrong.

As with any type of loan applications, whether they’re quick loans or not, there are several determinants you also need to tick on your checklist to ensure a harmonious application. Make sure you consider these top 5 things before applying for a quick loan.

1. Choose the Best Type of Quick Loans

Because moneylenders want the best for their borrowers (and their business), they’ve made quick loans much quicker by being overly permissive. Your responsibility as the borrower is to find the suitable quick loan option and there is a number of quick loans available. Some examples are personal loans which are unsecured quick loans that don’t need a collateral when applying so you can breathe a sigh of relief, especially with a bad credit score. Another one is payday loans which are good for short-term loans of scanty amounts. There are also co-signed loans which entail a co-signer to sign the loan for you. Or a loan from a credit union is fast enough to give you a quick loan just in the nick of time.

2. Check the Interest Rates

The accumulation of interest rates is how the lenders make their profit. It’s a percentage for the money borrowed within the unit of time. Whichever type of quick loan you choose, it’s imperative that you always ask questions pertaining to the monthly or yearly interest rates including upfront fees. The interest rates can pose as a drawback to borrowers. Never forget to ask the fees involved when you’re dealing with quick loans too. A small processing fee might be agreeable but be wary of all those undisclosed fees that they include in your monthly payments. Once you sign that contract, there’s no turning back.

3. Terms and Conditions

While there are different quick loans in the industry, the lengths of the loan also vary for each. Determining the loan’s terms is also vital in the total amount of your loan cost. The loan lengths can be identified in three ways, short-term, medium-term, and long-term loans. Quick loans are mostly classified in the short-term and medium-term loans. The former has a one-year length for paying an entire loan completely and is ideal for personal emergencies or businesses needing quick financial assistance, and the latter has a length of one to three years. Lastly, long- term loans, which are mostly contrary to quick loans, need a collateral support and is payable in three to 10 years’ time. You also need to discuss prepayment fees if you decide to pay your loan much earlier than the term allocated.

4. Loan Amount and Monthly Payments

Your monthly salary serves as the weighing scale of how much money you can borrow. In addition, it also determines how much you can commit for your monthly payment obligations. Before you nip down to the nearest quick loan office, make sure you have everything ready like your employment forms or an employment certification from your employer so you won’t be let down once the loaner shoots your application down due to insufficient requirements. List down all your sources of income and possible contributors like your spouse or another part- time job. Knowing how much your take-home pay is every month is the major deciding factor if you’re really capable of paying off a loan or not.

5. Your Financial Status

Your current financial situation can make or break your loan application. Before you do an all- out impulsive quick loan application, sit down and check if you can still squeeze it in your monthly or yearly budget. Take a piece of paper and jot down all your monthly and annual expenses. From there, you can decide whether you can manage to pay off a small or a big quick loan amount within the loan length.

Quick loans are fashioned in a way where even people struggling down to the last penny with a rough credit history is given an opportunity to keep their feet on the ground. Thanks to quick loans, their financial gloomy days are over.

About the Author

Maria Brooks, a certified financial planner, author and blogger, enjoys sharing tips on personal finance, business and entrepreneurship. She is currently working for My Quick Loans, which offers fast loans online in the UK including Christmas loans, Payday loans, Late Night loans, Weekday loans, Student Short Term Payday loans and many more.